Digital Economy Bill

Written evidence submitted by the Local Government Association (DEB 23)

1. About the Local Government Association (LGA)

1.1. The Local Government Association (LGA) is the national voice of local government. We work with councils to support, promote and improve local government.

1.2. We are a politically-led, cross party organisation which works on behalf of councils to ensure local government has a strong, credible voice with national government. We aim to influence and set the political agenda on the issues that matter to councils so they are able to deliver local solutions to national problems.

2. Summary

KEY MESSAGES

2.1. Part 1, Clause 1: The Government’s proposed creation of a broadband Universal Service Obligation (‘USO’) as a safety net for those residents and businesses not connected is a positive development. Councils have continually raised on-going concerns over residents’ lack of access to fast and reliable broadband especially in rural areas.

2.2. Access to fast and reliable digital connectivity is a necessity for households and businesses in the UK and is a major driver behind growth, jobs and the emerging creative industries. It is essential the USO is implemented as quickly as possible to ensure all residents in the UK have access to a minimum standard of connection.

2.3. A 10Mbps minimum download speed is a step in the right direction, but in the longer term standards must keep pace with national average speeds and the expectations of households, especially at peak times.

2.4. Download speed should only be one of a basket of indicators USO must meet. The USO specification should obligate suppliers to provide consistent uploads speeds at a minimum of 2Mbps with the aim of doubling that figure over the next 10 years.

2.5. We would like to see a new clause in the Bill to include a reporting function which would compel the Government to report annually on the progress, success and take up of the USO.

2.6. Part 1, Clause 2: We support the Government’s ambitions to empower consumers to more easily switch providers to help reduce household bills and encourage price competition in the market. As part of this, Ofcom should explore the viability of collective switching initiatives in the communications market.

2.7. Part 1, Clause 3: We welcome moves to allow consumers to receive compensation when their broadband services are below standard. The compensation process should be as simple as possible and the ultimate obligation to resolve issues should be on providers. To prevent residents and businesses suffering from long term broadband outages, the Bill should be amended to include a specific obligation for providers to fix faults with connections within appropriate timescales.

2.8. Part 2: We support the revision of the Electronic Communications Code to simplify the process of installing or upgrading digital infrastructure. It is important commercial operators work in partnership with councils, who maintain the best overview of local areas’ digital connectivity needs, to find the most viable locations for new infrastructure and ensure communities are properly engaged.

2.9. The Government’s Impact Assessment of the reform of the Electronic Communications Code conservatively estimates that the communications sector is likely to see benefits of £1 billion over a 20 year period from decreased rental charges as a result of new measures. We will seek clarity from the Government on how it will ensure this money is re-invested into extending mobile provision across the country.

2.10. Digital exclusion: The Government have indicated that they plan to table an amendment to this Bill, proposing that publicly-funded basic digital skills training is offered free of charge to adults in England who need it. Courses will be delivered by colleges and other adult education providers, and training will be funded from the existing Adult Education Budget (AEB). The Government’s commitment to upskill people with basic digital skills training is a step in the right direction. It is right that everyone has the opportunity to play an active economic and social role in an increasingly digital society. However, it is crucial that the Government is clear on how it will be funded, as resources are limited.

2.11. In order to prevent further digital exclusion, the Government should put in place a social tariff, in a similar manner to the telephony USO, for those who would face undue hardship having to pay for broadband services.

BACKGROUND INFORMATION

Access to digital services (Part 1)

3. The Universal Service Obligation (Clause 1)

3.1. The LGA welcomes the Government’s proposed creation of a broadband USO. Councils have continually raised on-going concerns over residents’ lack of access to fast and reliable broadband especially in rural areas.

3.2. Access to fast and reliable digital connectivity is a necessity for households and businesses in the UK, enabling them to utilise online services such as bill payments and online shopping, to access public services such as telehealth care and filing electronic tax returns. Excellent digital connectivity is also a major driver behind growth, jobs and the emerging creative industries and is particularly important to rural communities. It is essential the USO is implemented as quickly as possible to ensure all residents in the UK have access to a minimum standard of connection.

3.3. The USO will underpin the Government’s ambitions to deliver more services online at less cost including major transformation programmes like Universal Credit and Troubled Families and to make the NHS paperless by 2020. It will also be vital for the public sector workforce and elected representatives to operate more effectively and productively while working remotely.

3.4. Councils are best placed to understand the digital needs of local areas and have strongly supported the extension of access to fast and reliable connectivity through the Superfast Broadband Programme. Many councils are aiming to extend provision beyond the Programme’s target of passing 95 per cent of premises and, in some places, are hoping to achieve closer to 100 per cent by using funding from claw-back clauses in supplier contracts. Despite this, there will inevitably be some premises, mainly from remote rural areas, that won’t be reached by the current tranches of work. As such, the LGA welcomes the creation of a broadband USO as a safety net for those residents and businesses not connected.

3.5. A 10Mbps minimum download speed is a step in the right direction, but in the longer term this should increase in line with national average speeds. Over the next five years, commercial roll outs in our towns and cities (such as Virgin Media’s Project Lightning) will almost certainly see national average download speeds rise sharply. By 2020, it is likely that over 60 per cent of residents will be able to access services of 300Mbps and faster, with over 95 per cent of premises being able to access at least 30Mbps. For this reason minimum standards must keep pace with national average speeds and the expectations of households, especially at peak times.

3.6. The Government will outline the USO’s performance requirements in secondary legislation. The LGA have argued that download speed should only be one of a basket of indicators the Universal Service Obligation (USO) must meet. In our view, it will be imperative that the USO has specific obligations on upload speed. Fast and reliable upload speed is a growing requirement for rural businesses which utilise cloud services, video conferencing and send large data files. However, a survey conducted by The Federation of Small Businesses found over half of businesses (61 per cent) were dissatisfied with the upload speed they were receiving from their connection. [1] With this in mind, the USO specification should obligate suppliers to provide consistent uploads speeds at a minimum of 2Mbps with the aim of doubling that figure over the next 10 years.

3.7. To prevent residents and businesses suffering from long term broadband outages, there should be a specific obligation within the USO for Universal Service Providers (USPs) to fix faults with connections within appropriate timescales.

3.8. We would like to see a new clause in the Bill to include a reporting function which would compel the Government to report annually on the progress, success and take up of the USO. The annual report should include information on the number of premises that have been supplied with 10Mbps+ connections as a result of the USO including the number of premises that have been required to cover some of the cost of connection and the average cost of connection per premise.

4. Switching providers (Clause 2)

4.1. Clause 2 gives Ofcom the power to obligate communications providers to make the switching process easier, especially in cases where they have bought bundled packages, for example broadband, mobile and television combined. We support the Government’s ambitions to empower consumers to more easily switch providers to help reduce household bills and encourage price competition in the market.

4.2. As part of this, Ofcom should explore the viability of collective switching initiatives in the communications market. This would aggregate demand across consumers to negotiate with suppliers on their behalf. By using such initiatives in the energy market, local government was able to save residents an average of £232 on household energy bills following council-led collective switching auctions.

5. Consumer compensation (Clause 3)

5.1. The LGA welcomes moves to allow consumers to receive compensation when their broadband services are below standard. The compensation process should be as simple as possible and the ultimate obligation to resolve issues should be on providers. To prevent residents and businesses suffering from long term broadband outages, the Bill should be amended to include a specific obligation for providers to fix faults with connections within appropriate timescales.

6. Digital infrastructure and the Electronic Communications Code (Part 2 and Schedules 1, 2 and 3)

6.1. Building the physical infrastructure required to support excellent mobile coverage across the country is key to ensuring all residents have access to 21st century digital connectivity, especially in some of the country’s most rural areas. To accelerate the roll out of mobile coverage, we support the revision of the Electronic Communications Code to simplify the process of installing or upgrading digital infrastructure. However, it is important commercial operators work in partnership with councils, who maintain the best overview of local areas’ digital connectivity needs, to find the most viable locations for new infrastructure and ensure communities are properly engaged.

6.2. The Government’s Impact Assessment of the reform of the Electronic Communications Code conservatively estimates that the communications sector is likely to see benefits of £1 billion over a 20 year period from decreased rental charges as a result of new measures, which the Government says will "create an environment significantly more conducive to investment." [2] We will seek clarity from Government on how it will ensure this money is pumped back into extending mobile provision across the country.

7. Online pornography (Part 3)

7.1. Clause 15 restricts the availability of online pornographic materials to people under the age of 18 by requiring online commercial providers of pornography to put in place age verification controls. Councils have a responsibility to safeguard and promote the welfare of children and young people living in their area. There is growing concern about the exposure of children to inappropriate online material and the LGA welcomes Government action aimed at preventing children from accessing online pornography.

8. Digital Government (Part 5)

Public service delivery, civil registration, debt owed to the public sector, fraud against the public sector, sharing for research and statistical purposes

8.1. Clause 29 provides a power to specify by regulation the objectives under which information may be disclosed. In the Bill’s Explanatory Notes the Government outlines its intention to make regulations relating to the Troubled Families Programme, identifying vulnerable people who may require assistance with re-tuning television equipment and assisting people living in fuel poverty. County councils and district councils in England and London boroughs have been identified as organisations which may disclose or receive information using the data sharing gateway. The Bill should be amended to include Combined Authorities in this list of organisations.

8.2. Effective sharing of information is essential for the delivery of better, joined-up public services. Local authorities are one of the key local service providers working across multiple agencies to deliver services and to support vulnerable and disadvantaged people. This legislative framework will provide some legal framework for sharing data, the lack of which often leads to uncertainty in local authorities about what can and cannot be shared.

9. Ofcom reports (Part 6)

9.1. At present, broadband suppliers do not provide open access to their address-level data on broadband line speeds. This means there is no single place that consumers can compare side by side estimates of the broadband speeds that could be supplied to their home. Consumers can only get a true assessment of the speed their premise will achieve by conducting a line speed test on a broadband provider’s website. This makes it much harder to choose the best package as it does not provide a simple view of the market.

9.2. The LGA welcomes Government action which would promote competition in the telecommunications sector and provide consumers with the knowledge and power to easily switch providers and find the best deal. Ofcom should look to share all its data publicly by default and abide by appropriate open data standards to allow third parties utilise the data in new and innovative ways.

9.3. The potential commercially sensitive nature of some data sets, for example the planned roll out of mobile infrastructure, should not preclude local government – as the main representative of communities – from having access in some form. Councils are best placed to understand the digital needs of local areas and access to such data would help inform local digital strategies and interventions going forward.

9.4. Councils also remain concerned at the representative nature of Ofcom’s mobile data – often mobile connectivity data shared by Ofcom is not reflective of the situation in many rural areas on the ground. Any measures to improve the frequency of the data is shared, and the quality of mobile data sets, would be welcomed.

10. Digital exclusion

10.1. The Government has indicated that they plan to table an amendment to this Bill, proposing that publicly-funded basic digital skills training is offered free of charge to adults in England who need it. Courses will be delivered by colleges and other adult education providers, and training will be funded from the existing Adult Education Budget (AEB). [3]

10.2. The Government’s commitment to upskill people with basic digital skills training is a step in the right direction. It is right that everyone has the opportunity to play an active economic and social role in an increasingly digital society. However, it is crucial that the Government is clear on how it will be funded, as resources are limited. Councils are working hard to support adults with their skills needs and are working with colleges and other training and employment providers to create a more coherent employment and skills system to meet local economic needs. Given this, any new requirements should be matched by additional funding from central Government. The new training requirement should be also locally routed and commissioned.

10.3. The AEB is already the result of three reduced and consolidated funds and is being progressively devolved to combined authorities. With a funding envelope of £1.5bn a year across England, statutory entitlements already account for £0.5bn. Devolution suggests a greater role in determining how the AEB money will be spent locally, but areas need maximum freedom and flexibility to determine this.  

10.4. For many local areas, the AEB is likely to be stretched, particularly in areas with high unemployment and low skills levels where a large proportion of the budget will be spent on statutory entitlements such as Maths and English and ESOL programmes as part of the statutory entitlements to prepare people for life and work. Many areas are concerned how much will be left from AEB once entitlements are accounted for. Additional separate funding for the new digital inclusion requirement is essential and should be added to the AEB. It should not be funded through existing limited resources.

10.5. Local authorities are involved in trials to support their residents through DWP’s ‘Universal Support delivered Locally’ to enable residents to become digitally included so they are in a position to access Universal Credit online. It will be important to learn lessons from these to understand the costs involved.

10.6. In order to prevent further digital exclusion, the Government should put in place a social tariff, in a similar manner to the telephony USO, for those who would face undue hardship having to pay for broadband services. Research commissioned by Ofcom in 2014 demonstrated "marked relationships between socio-economic deprivation and [poor] broadband availability in cities". [4] Our members also report similar correlations in rural areas potentially signalling that demand amongst the low income demographic could be high.

October 2016

 

Prepared 13th October 2016